How to stsrt multi-family Investing?

6 Replies

I’m new to this real estate investing world. I been reading books but have not got hands on experience yet. I’m interested in the multi-family niche. What is a way I can get started with the little capital that I have? Help needed please!!!

The easiest way is probably to use an FHA loan or VA loan if you qualify and buy a duplex up to a fourplex with the low down payment requirement of a FHA or VA. You have to live in one unit if you use one of those loan programs but you can rent out the other units.

There are many different approaches you can take to actually start investing in multifamily.

Before deciding on HOW you want to start taking action, you first need to stop and think about WHY you are doing it. Is it because you are looking to be more “time-wealthy” and therefore want a passive role? Or is it that you don’t like your corrent job and would like to become a full time active investor in multifamily? 

The answer to those questions will give you a better picture of the approach you should take. But regardless, you should always start by educating yourself, which it looks like you are doing already.

Next step would be to determine what vehicle or strategy within multifamily is going to take you to where you want to go. You shouldnt focus/invest in all kinds of multifamily (ground up development, small multis BRRRR, large apartments syndication, medium size multifamily wholesale, etc). Study them and decide on the one you will be putting all your efforts on.

Lastly go ahead and look at the different options you have to start getting involved: Go and work for an established local (or not) that does what you want to do, become a member of an investor club where you can potentially partner up with experienced investors (you need to bring value), start deploying some capital into some passive opportunities to start learning the process, start buying some properties with your own capital and grow from there....

I hope this is somewhat helpful. At the end of the day only you know where you want to go and by way of education will be able to determine the best route. There’s no right or wrong path.

Great advice from @Lennon Lee . It sounds cliche, but you why is crucial to your success in REI. 1.) Find your why 2.) Choose a niche 3.) Educate your self on said niche 4.) Dive in head first, aka learn from doing deals. Don't be a seminar junky.

I wrote an article on this topic recently and posted it in BP. Here are the main points: 

1. Buy buildings with your own cash and track record. This is for the 1% that have both the money to buy a $1million+ building and the experience to get a loan for that building, as well as to be able to operate it.

2. Buy buildings with partners that together have the money and track record. 

3. Syndicate – this in my mind should be done by sponsors that have experience with small multi-family at a minimum. A syndication is basically gathering a bunch of people together to passively invest in your/your partners deal. 

4. Raise money for a Syndication – This is a great beginner's way for someone that has a network and wants to get involved in the deal. This allows you to invest in the deal and build your investor network as well as likely take part in the General Partnership. You will need to do other things in the LLC in order to get paid, as you can't raise money without a broker's license and get paid.

5. Invest your own money in a syndication. Be sure you find ways to be involved.

6. Be a bird dog and find the deals for other apartment buyers. You can get paid $50k or possibly more for finding the right deal for a buyer. 

7. Volunteer or get paid to work with an investor. 

8. Start small. This is what I did. When I started I was buying 1-4 unit buildings for rentals and I was completing flips. 

9. Become a property manager, real estate agent (commercial), appraiser, inspector, mortgage broker, etc.

Full article is here:

Hi Jarvis-  The pros here are awesome by the way- they are all very eager to help newbies like us. If you are not already, start looking at duplexes and 4-plexes on-line as well and evaluate them using the Bigger Pockets calculators.  This is a great way to learn and to get motivated.  Remember investors need capital and deals!